China's 5 big tech issues for 2022
- China's technology sector has taken a wild ride over the past year, facing tighter regulations and a push from Beijing for greater self-sufficiency at the same time.
- Beijing is pushing the development of economically strategic technologies such as semiconductors and electric vehicles, while simultaneously reining in domestic tech firms.
- Those are among the important themes that will be addressed at CNBC's annual East Tech West event in the Nansha district of Guangzhou in southern China.
GUANGZHOU, China — China's technology sector has taken a wild ride over the past year, with regulations tightened, billions of dollars wiped off companies' market value, and a continuing push from Beijing for technological self-sufficiency.
Those are among the important themes that will be addressed at CNBC's annual East Tech West event in the Nansha district of Guangzhou in southern China.
Here's a look at the top concerns and focuses of China's technology sector right now.
China's tech crackdown
In November 2020, what would have been a world record-setting initial public offering of fintech giant Ant Group was suspended.
Following that, Beijing introduced a slew of new rules in areas from antitrust for internet platforms and a bolstered data protection law. Both e-commerce giant Alibaba and food delivery firm Meituan have faced antitrust fines.
That has weighed heavily on China's internet names. For example, Alibaba's shares are down 41% year-to-date.
Several questions are swirling:
- Will China introduce more new regulation and in what areas?
- What companies could be targeted next?
- What does it mean for growth of the tech sector in China?
CNBC tackled some of this in a recent episode of the "Beyond the Valley" podcast below. Those conversations will continue at East Tech West.
The continuing technology rivalry between the U.S. and China has added urgency to Beijing's push for increased self-sufficiency across a variety of sectors. One of those is semiconductors, which are critical for everything from cars to mobile phones.
But China is struggling to catch up with the U.S. and other countries, and that's because of the complexity of the semiconductor supply chain, which is dominated by foreign companies.
A good example is the field of chip manufacturing. SMIC, which is China's largest contract chip manufacturer, is several years behind Taiwan's TSMC and South Korea's Samsung. SMIC is actually unable to manufacture the latest cutting-edge chips required for leading smartphones.
Foreign companies dominate the most advanced tools and equipment required for the manufacture of high-end chips. U.S. sanctions have denied China access to some of those tools. Chinese companies can't compete.
How China will boost its domestic chip industry in the face of those hurdles is a major, ongoing debate.